Oklahoma Bankers Association We make bankers better!
At noon, Monday, Feb. 5, the Oklahoma legislature convened for the Second Session of the 59th Legislature.
The legislative session will run until 5 p.m. on the last Friday in May. There were over 3,000 bills introduced this session, that’s in addition to the hundreds of bills introduced last year that are eligible to be heard again.
We have read through all the bills that are new, and with the ones we were tracking from last year, the OBA will start this session tracking 678 different pieces of legislation that could affect your industry.
The good news is the majority of these bills will die when we hit the first deadline on Feb. 29.
Before we get to the legislation the OBA is tracking, I wanted to share with you what the governor had to say in his State of the State address, where he laid out his legislative agenda for the upcoming session
Gov. Stitt covered a wide range of issues in his annual State of the State address on Feb. 5. He talked about Christian principles, business recruitment goals and getting government out of the way. The governor did specifically stress he wants a flat budget across state government, and he will sign any tax cut that makes it to his desk for his final signature. There were also comments made by the governor regarding his ongoing feud with Oklahoma’s tribal nations.
The governor spent a good amount of his speech on education. You’ll remember last year, the major issue during session was the parent choice tax credit and teacher pay raises. He never mentioned anything regarding a pay raise for teachers, but he did stress there needs to be further expansion of charter schools. The governor has always been supportive of higher education in Oklahoma, but in this address, there was a reference to something he has said in the past: “There is consideration of consolidating colleges and universities,” if they aren’t focused on meeting the needs of the Oklahoma workforce.
The governor’s address is what HE wants to happen during the legislative session, but he still has to get it approved by both the House and the Senate. It’s how the process works. The House, Senate and governor’s office will posture on certain issues all session, and at the end of May, the three chambers will hopefully work together to come to some sort of agreement.
All parties usually get something, and nobody ever gets every thing that they want.
Every year when we read all the bills, you can usually figure out pretty quickly what the most common themes are going to be during the legislative session. This year it’s education and tax cuts.
No surprise education is at the top of the list, but it’s unusual there were so many bills looking to cut all sorts of taxes. Wanting to cut taxes shouldn’t be a surprise to anyone – after all, it’s an election year, and the states rainy day fund is loaded with over $1.42 billion.
While we are busy watching hundreds of bills, the OBA has introduced several pieces of legislation this session. Below is all you need to know regarding the bills we are pushing.
HB 4092 — As you know, we have been pushing the ACRE (Accessing Credit for Rural Economies) for the past couple of years in Congress. This year, we are going to see if we can get the same bill done at the state level. ACRE excludes from gross income the interest received by a qualified lender on all loans secured by farm real estate. Additionally, ACRE would exclude from gross income the interest received by a qualified lender on home mortgage loans of $500,000 or less in rural communities of no more than 2,500 people.
HB 2776 — This bill is a carry-over from last year – it’s the update to the Uniform Commercial Code. We get updates for the UCC about every two years and they’ve never been a problem until this one arrived last year. This is a 220-page bill that usually gets passed with no questions asked as it’s just clean-up language nobody gets very excited about. The version that was introduced last year included a definition for central bank digital currency. While it is simply a definition, the folks on the far right apparently lost their minds, and we were forced to pull the bill. They thought it was a sneaky way to legitimize a central digital currency, and they wouldn’t listen to any of our arguments against that mindset. This year, we have removed all the language pertaining to central bank digital currency, so it should put certain folks at ease and allow the bill to move through the process.
HB 4049 — This bill establishes standards for low-income credit designations. As we speak, there are 12 state-chartered credit unions in Oklahoma. The vast majority of credit unions in Oklahoma are federally chartered, for two reasons: 1. They would rather be regulated by CUNA and not the state, and 2. They don’t want to pay the bank privilege tax in Oklahoma currently in state statute. This bill would allow the remaining state-chartered credit unions to be designated a federally insured low-income credit union. If they were to get this designation, it would allow them to operate as if they were a federally chartered credit union with a low-income designation. If this bill were to become law, there are benefits a state-chartered credit union would receive with the low-income designation:
An exception from the statutory cap on member business lending, which expands access to capital for small business and helps credit unions to diversify their portfolios.
Eligibility for grants and low interest loans from the Community Development Revolving Loan Fund.
Ability to accept non-members deposits from any source.
Authority to obtain supplemental capital.
We have and will continue to strongly oppose this bill.
As I mentioned earlier in this article, there have been numerous bills introduced that propose some type of tax cut. While there are too many to mention, below are those that have been introduced by Speaker McCall and are more likely to move through the process.
HB 2948 — Corporate income tax phase out over five years.
HB 2949 — Flat rate 4.25% personal income tax effective Jan. 1, 2024; rate imposed on taxable income amounts above specific figures based on filing status.
HB 2950 — .25% personal income tax decrease effective Jan. 1, 2024.
HB 2951 — .25% personal income tax decrease for 2024 and 2025, with rates to restore to current level for 2026 and following tax years.
HB 2952 — .50% personal income tax decrease for 2024 and 2025, with rates to restore to current level for 2026, and the following tax years.
HB 2953 — As amended, eliminates the current standard deduction and changes the personal income taxing framework from bracket based system to a flat rate system. For tax year 2024 and 2025, sets the flat rate at 4.25%, with the rate imposed on taxable income amounts above specific figures based on filing status.
HB 1954 — .50% personal income tax decrease effective Jan. 1, 2024, and the following tax years.
We are early into this session, and it’s too soon to know how this year is going to go. I do know the further along we get, it will most likely start to get a little ugly. There are going to be some tough votes to make for the members, and with it being an election year for all of the House members and half of the Senate, tempers and emotions will definitely rise.
We’ll continue to monitor everything that could have any type of impact on your bank. When I settle in and work on next month’s column, we’ll have a much better idea where we are on all legislation – not just the bills the OBA is tracking.
Should you have any questions or comments on any of the bills we are tracking or any issue being discussed at the Capitol, please don’t hesitate to contact me.